1.1 Preface
When I graduated from college with a business degree over thirty years ago, I became involved in a start-up business. Although I had a business education, that education focused on efficiently running an established business. I had learned little about starting and growing a business with high growth potential. Six years later, after pursuing business ideas that left me neither bankrupt nor wealthy, I ended up back in graduate school where I completed an MBA and a Ph.D. My foray into business ownership left me with a desire to learn and teach entrepreneurship in a more cohesive way. I didn't think everything had to be learned by trial and error. In my academic career I have studied entrepreneurs and entrepreneurship for 25 years. Over time I have come to realize that the mediocre results of my businesses were largely a function of the fact that I started businesses in fields that were destined for mediocre results. While I did better than most of my competitors, my performance was only marginally better.
My wife is an avid gardener. As I have helped her garden, I have noticed that the degree to which plants thrive is a function of the plants that are selected, the place they are planted, and the care they are given. Almost two decades ago, my wife and I planted a maple tree in our yard. It seemed OK the first year, but the next year it didn't look very good and the third year it failed to leaf out. We dug it up and planted another maple tree with similar results. We then planted a linden tree. It failed too. After about ten years we let the grass fill in and decided we really didn't want a tree in that spot.
When we moved to our current home in 2007, we ordered 200 trees from the forest service that we planted in various locations on our property. They have all been cared for similarly. The sun shines on them in about the same way. They are watered mostly by rainfall. Most are still surviving, but some are only two feet tall, while others of the same variety exceed 15 feet. Those that have done the best are in places where the conditions are best for that particular tree species. Thus, having the right tree in the right spot makes a lot of difference in the tree's performance. Meanwhile, I have noticed that poorly performing trees are just as much – or more – work than are trees that thrive.
We believe the analogy applies in business start-ups. Entrepreneurial ventures' performance, like that of trees, vary according to the quality of the opportunity they are pursuing, the fit between themselves and the ground in which they take root, and the care they are given. In a journal article we published in 20031 we discuss the fact that even though entrepreneurship researchers have paid lip service to the quality of the opportunity, few entrepreneurship articles published in major management journals between 1990 and 2000 dealt with the concept of opportunity in any form. Since 2003, there has been quite a bit of theorizing about opportunity, but in many ways it remains an elusive concept.
As a result, I have devoted much of my research and teaching time over the past nine years to developing a better understanding of what opportunity is, and how opportunity identification can be effectively taught to students in a university setting. This book is the result of that endeavor. Drawing on academic research, years of classroom experience, my personal entrepreneurial experience, and the experiences of many other entrepreneurs, this volume focuses on a process of identifying and evaluating business opportunities that are suited to you, the reader. As in the tree analogy, if you are going to go to all of the work to grow a business, it makes sense to select an opportunity that has the highest probability of survival and growth.
In the fall of 2009, Thomas Allison became my research assistant. Like me, he had some experience trying to start a business. And like me, he came out of the experience with a burning desire to understand what makes start-up businesses successful. He was a fast learner, and soon was researching and writing for major sections of the book. Usually student assistants get mentioned, but don't get credited as co-authors. Tom filled a significant role in making this book happen, so he has become my co-author. He is currently midway through a Ph.D. program at the University of Oklahoma.
The book has three major sections. The first section focuses on what you can do as an individual to enhance your opportunity identification skills. The second section develops and demonstrates a comprehensive model of opportunity evaluation. The third and final section describes how to develop an effective business model to exploit your opportunity.
We have tested the principles in this book in classroom experiments and shown that students applying these principles develop more original and better business ideas. We have sought to both ground this book in science – the latest research on entrepreneurship, and to convey this information in an accessible way. In doing so, we hope to offer our fellow students of entrepreneurship a guide to selecting those entrepreneurial opportunities that are most likely to thrive in the conditions at hand. It is our desire that your ventures take root and thrive.